5 it is already to stabilize the deficit

Sooner or later, need good stop to tell a story. Sooner or later, need well confess to the French that the State of the country, far from improvement, finance deteriorates. This admission is more much delay. While it receives its European counterparts this evening and Nice tomorrow, Minister of economy, industry and employment should let the Ecofin and Eurogroup. But not the presentation of the draft budget 2009, Friday, September 26. This would be a breach of the constitutional principle of "budgetary sincerity." The time approach therefore admit that public deficit drops in 2008 not below its level of 2007, or 2.7 of GDP. And, according to calculations still unofficial Bercy, it is best that we can hope... The public debt, instead of departing downward this year, it should bounce over 65 of GDP in the absence of privatization and under the effect of inflation and interest rates.

It would be wrong to see in this update a mere incident of course. Is any financial path passed in Brussels in December 2007 which is questioned. End of March, the France has already corrected its deficit 2008 to 2.5, but in gripping the goal "zero deficit" in 2012. However, this was unlikely five months ago became unreal. Why Because this implies reducing the structural deficit now the form excluding the effect of conditions of 0.6 point year. Our best recent performance was the decrease by 0.3 point in 2004 and 2005. And this virtually imposed a stabilization of the public expenditure in volume on the rest of the legislature. Neither social security nor local communities take the path. Finally, the General review of public policy was to be the missing piece: it must be, at most, 6 billion euros in savings in 2011, barely 2 of the expenditure of the general budget.

Properly, the Government can incriminate growth collapsed international shocks and argue that with 1 growth compared to 2.5, it is already to stabilize the deficit. The argument is strong, but it is of low relief to the twitch that. Because, at the time where the dream of 2008 fainted from deficits in regression as almost everywhere else in the zone euro , recessional the nightmare of 2003, "annus horribilis" for our public finances. A many ways, these two vintages are similar. One as the other following a presidential election year, that of Jacques Chirac in 2002, that of Nicolas Sarkozy in 2007. One as the other begin to experience the full effects of tax promises implemented immediately after the election. As of summer 2002, Jacques Chirac is apply a discount of 5 income tax, followed, in the 2003 budget, a decrease of 1. It costs then total EUR 6 billion to the State. It is of course tempting to operate closer to the 'tax package' of July 2007, which the budgetary impact of EUR 9 billion in 2008.

In 2003 as in 2008, must support either the commitment not funded by the outgoing team, unfinished reforms. Six years ago, it had been necessary to register collective budget EUR 2 billion to fund recovery, by the Socialists, the ceiling of the family quotient. In 2008, the social security deficit increases the "invoice" left to the pensions scheme by a reform of 2003 which covered only 40 per cent of funding requirements. Last similar 2003 growth does not exceed... 1.1. This retrospective small has concerns about. Since that year, public finances have accumulated a delay as it always was not filled five years after. At the time, the State deficit had reached an absolute record: EUR 56.7 billion. Because of the legacy of the past, the decline in the growth and tax cuts, are 11 billion in tax revenue that lack appeal. In 2003, the "hole" of social security is multiplied by three to 10 billion euros. And the balance of local ceases to be excess.

Overall, the public deficit jumps by 1 point of GDP to 4.1. And the debt ratio blithely crosses the threshold of 60 of GDP allowed by the European stability pact to 63. This terrible year 2003, the France is never really recovered. Since then, the deficit of the State has returned only once (in 2006) in the primary balance, i.e. prior to payment of the interest on the debt. Social security has never really won 10 billion ridge line. In local communities, they dig since 2004 public deficit rather than reduce it. Of course, some errors troops years repeat not this time. The first is the evolution of the expenditure. The credit of the State are now frozen in volume. The second is for the use of the tax relief. In the summer 2007 have been voted without digging the State deficit. They are also vested in the competitiveness of the economy as much if not more to stimulus by the application: it is the meaning of the exemptions from contributions on overtime. However, all the risks have not been identified. The proliferation of tax credits, actual mites in tax revenues, allow Ministers around the framework of their budgets. These small budgetary arrangements are painless in period of growth. They can be formidable during the economic downturn.